Uk
Mortgage lending in UK up after summer dip
Gross mortgage lending in the UK reached £20 billion in September, up 2% from the previous month and up 12% year on year, the latest figures show. It is the fourth month in a row that there has been a sharp improvement in year on year lending, says the report from the Council of Mortgage Lenders. Gross lending in the third quarter of 2015 was therefore an estimated £61.4 billion some 18% higher than the £52.2 billion advanced in the second quarter, and an increase of 12% on the third quarter in 2014, when lending totalled £55 billion. ‘Mortgage lending is currently enjoying its best spell since 2008. As we expected, the second half of 2015 has seen a pickup in activity in the housing market after a slow start to the year,’ said CML economist Mohammad Jamei. ‘Low inflation, strong wage growth, falling unemployment and competitive mortgage deals are all helping to support housing demand. We expect to see further modest growth towards the end of the year, although affordability pressures are likely to limit gains for home movers and first time buyers,’ he added. According to Henry Woodcock, principal mortgage consultant at IRESS, buoyant house purchase lending, paired with a buy to let mortgage market at its strongest level for two years has sustained momentum. ‘On top of this, the number of mortgage products available is at an all-time high, providing consumers with far more choice and a healthy remortgage market are all combining to create a real buzz,’ he said. ‘With speculation around an interest rate rise dying down and unlikely to happen until the first half of 2016, consumers should benefit. Historically attractive rates will be available for longer, continuing to support buyer demand,’ he added. John Eastgate, sales and marketing director of OneSavings Bank, also believes that it is the buoyancy in the market supported by persistently low mortgage rates that is boosting lending. ‘The recent global economic uncertainty has caused central bankers to hit the pause button on possible rate rises, with many speculating that the UK may not see rates increasing before late 2016. House prices also grew at their slowest rate for two years last month, and if this trend continues, should ease affordability issues for buyers,’ he explained. Continue reading
UK property sales up over 5% year on year
The number of UK residential property sales increased by 0.8% between August and September 2015, according to the latest figures published by HMRC. The September seasonally adjusted figure is 5.4% higher compared with the same month last year while the number of non-adjusted transactions was around the same level as in August. Overall the provisional seasonally adjusted UK property transaction count for September 2015 was 106,030 residential and 10,300 non-residential transactions. Meanwhile, the latest Land Registry data shows there were 1,513,920 applications in the month of September, topped by the South East with 349,215. Some 373,424 were applications were in respect of registered land (dealings) 680,982 were applications to obtain an official copy of a register or title plan, 210,635 were searches and 88,229 were transactions for value. Peter Rollings, chief executive officer of Marsh & Parsons, believes that there was a real step change in the gears of housing market activity over the summer. ‘Since June property sales have been ticking along nicely, with this month on month rise the latest cause for optimism. There’s now clear blue water between sales levels now and a year ago and we’re seeing real eagerness from buyers,’ he explained. ‘Already, many buyers and sellers will be using the countdown to Christmas as their deadline to move home and complete transactions, meaning activity often picks up the pace in autumn,’ he added. But he pointed out that London is a city of two halves at the moment. ‘At the top end, buyers are more cautious, and are taking their time to get used to steeper Stamp Duty on million pound plus property sales,’ he explained. ‘But at the mid and lower range of the market where domestic buyers tend to dominate there remain high levels of demand facing up to restricted housing stock. Here we’re seeing good activity when property is priced correctly, and longer chains than ever as sales activity stacks up,’ he added. Continue reading
UK commercial property investment set to reach new record high in 2015
Investment volumes in UK commercial property are set to exceed £70 billion in 2015, the highest on record, according to the latest research to be published. Almost £50 billion of transactions were completed in the first three quarters of this year and, with a healthy pipeline of deals, quarter four volumes should exceed £20 billion, as they did in 2013 and 2014, says the report from Carter Jonas, the UK property consultancy. Based on an analysis of Propertydata figures, total deal volumes for the first nine months of this year were up by 17% against the same period in 2014 when they were £41.7 billion. Much of this capital came from overseas investors, up 45% on the same period last year at £24.2 billion in 2015 up from £16.6 billion in 2014, accounting for nearly 50% of total investment. By the year end, international investors will account for over 50% of the UK market for the first time, compared with a market share of less than 25% some 15 years ago, the report points out. Most of the growth in activity has been driven by a sharp rise in deals involving hotels, leisure and specialist property assets, with investment volumes boosted by a number of sizeable portfolio deals. Investment volumes in offices and retail warehousing rose by 12% to 13% over the same period. ‘There is still plenty of capital chasing commercial property, with this year set to be record breaking. However, with the market edging towards its natural peak in the cycle, a pause for breath seems likely in 2016,’ said Darren Yates, head of research at Carter Jonas. ‘Moreover, investors will need to factor in headwinds such as the anticipated interest rate rise and the EU referendum may start to play on investors’ minds,’ he added. The report also points out that significant yield compression is already a feature across the mainstream sectors. As such, good value investment opportunities are becoming difficult to source, particularly in central London and, increasingly, in the large regional cities. Investors are therefore considering value-add investments and development as a means of generating better returns. Assets outside the mainstream sectors such as student accommodation and the private rented sector (PRS), which offer higher yields and diversification benefits, are also seeing significant interest. Demand for the smaller established cities such as Oxford, Cambridge and Bath has also risen sharply, in recognition of their strong performance, particularly in 2014. However, supply is also restricted in these locations, which could add to downward pressure on yields. ‘Whilst we will continue to see further yield compression in some parts of the market, this could taper off in the next three to six months. However, when viewed against current bond rates, property yields still offer good value and, with rental growth coming through, there is still an incentive to invest in UK commercial property,’ said Mike Prosser, partner in the investment team at Carter Jonas. Continue reading
